When the surrounding environment is stable and unchanging, an assertive style is often required to keep employees productive and motivated to work hard, despite the lack of competition or the abundance of restrictive regulations. Thoughtful functioning is also frequently needed in this type of organizational setting. Employees are often attracted to and remain committed to this type of organization because of its stability and reliability. In closely-held enterprises, they often like they are “family.” For these employees, consistency of practice and rationality are often particularly important. The thoughtful leader tends to emphasize these factors.
Unstable Environment
Many other closely-held enterprises do not, at least on the surface, appear to be as fortunate as these more stable enterprises. They exist in an environment that is unstable and highly turbulent, hovering on the brink of both order and chaos. When enterprises operate in this type of environment, both inspiring and participating styles are strongly needed. Closely-held enterprises (typically living with unclear boundaries) must hold a clear sense of mission if they are to survive the turbulence of an unstable environment. The inspiring entrepreneurial leader helps a closely-held enterprise stay on track and assists in the ongoing clarification of the various components of a mission statement.
Along with a potential loss of mission, closely-held enterprises that exist in unstable environments are often vulnerable to a loss in any sense of commitment on the part of those working in the enterprise. The unclear boundaries, the shifting values of workers and the newly emerging emphasis on knowledge as capital make it hard for leaders of closely-held enterprises to elicit commitment from their employees. A participating entrepreneurial leader can help build this commitment in a closely-held enterprise.
In the next essay, we turn to two other characteristics that interplay with entrepreneurial leadership styles: organizational structures and operations, and organizational culture.
